Chemicals maker Dow lowers Q3 revenue forecast on partial outage at Texas plant
1:29 pm Thursday, September 12th, 2024
By Sourasis Bose
(Reuters) -U.S. chemicals maker Dow lowered its third-quarter revenue forecast on Thursday due to a partial outage at one of its plants in Texas following Hurricane Beryl.
The company’s CEO Jim Fitterling told a Morgan Stanley conference that one of its ethylene crackers went offline in July as it was ramping up operations after the hurricane.
The impact of the outage could range between $125 million and $150 million as a combination of lost production and costs, Fitterling added.
Dow now expects its third-quarter revenue to be approximately $10.6 billion, down from its previous estimate of $11.1 billion. The news sent its shares down 1.1% in afternoon trade.
Wall Street analysts had estimated a revenue of $11 billion for the third quarter, according to LSEG data.
“We anticipate that the cracker will be back in operation at reduced rates by the end of the quarter,” Fitterling said.
The Midland, Michigan-based company is also facing higher input costs and margin compression in Europe but expects market dynamics to improve in the U.S. and Europe after anticipated rate cuts.
Fitterling added that plants were able to operate through Hurricane Francine and the company expects fewer weather-related events in the fourth quarter.
(Reporting by Sourasis Bose in Bengaluru; Editing by Shreya Biswas and Tasim Zahid)
